Survey Finds Finance CFOs Anticipating Year-End Bonus Increases

Bonus activity for year-end 2011 is looking up for finance execs, according to a survey of financial, insurance and real estate industry chief financial officers interviewed recently for recruiter Robert Half International's latest employment report.

The recruiter interviewed finance, insurance, and real estate CFOs who indicated they had paid bonuses last year. Almost half-48 percent-of a group of several dozen respondents who offered employees year-end bonuses in 2010 anticipate that bonuses this year will be higher than they were a year ago.

Twenty-three percent of the finance CFOs-who were interviewed in June and July of this year-expect that bonus levels will decrease, and another 27 expect no change.

It comes down to one thing: An interest in retaining talented professionals, according to Dawn Fay, Robert Half International district president for New York and New Jersey.

"I can sum it up in a word-retention," Fay told eFinancialCareers, noting that where unemployment is rampant, companies continue to have trouble finding the talent they're after. "It's a time of extremes. There are so many high unemployment numbers in so many sectors, [the right] skill sets are hard to find."

In a competitive sector like finance, if bonuses aren't offered or increased, there may be a drain on talent, Fay observes, adding that the cost to replace the right individual would frequently be higher than the cost of giving them an attractive bonus. There are other perks being offered employees, but bonuses are clearly number one on their wish list, says Fay.

Robert Half also interviewed CFOs in manufacturing and other businesses, and interestingly enough, finance CFOs were the most optimistic of all industry CFOs whose firms offered bonuses last year.

For instance, just 19 percent of CFOs in manufacturing anticipate bonus increases, with 69 percent expecting bonuses to be unchanged this year.

Fifty-six percent of professional services CFOs say bonuses will be unchanged this year with 23 percent expecting increases and 19 percent expecting decreases.

Twenty-nine percent of retail industry CFOs see bonuses trending downward for 2011, with 61 percent expecting no change.

Thirty-one percent of transportation CFOs say bonuses will rise this year, while 17 percent expect to see declines and 46 percent seeing no change.

Seventy-eight percent of construction industry CFOs said their bonus structure would remain unchanged this year, while 11 percent see bonus payments decreasing and 7 percent see them increasing.

The Robert Half estimates came after Alan Johnson of New York-based compensation consultant Johnson Associates issued differing incentive compensation scenarios for 2011. In May, Johnson was fairly optimistic about year-end bonuses, but by August, the firm concluded that "for major investment and commercial banking firms, incentive compensation is projected lower, with variation by business."

Fixed income banking professionals could see incentive-based pay decline 20 to 30 percent, and equity asset managers might see no change this year to a slight 5 percent increase, Johnson Associates said, for instance.

"We'll soon see" what will actually transpire, says Fay.